June 21, 2018 / 7:28 PM / in a month

FOREX-Dollar retreats from 11-month high; sterling rises after BOE

    * Philly Fed business index sinks to 1-1/2-year low
    * Lower U.S. yields, technical factors pressure dollar
    * Pound rises after BoE economist calls for rate hike 
    * Mexican peso rises after central bank hikes rates

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, June 21 (Reuters) - The dollar fell from an
11-month high against a basket of major currencies on
profit-taking on Thursday, while sterling recovered from a
seven-month low as the Bank of England's top economist
unexpectedly supported an interest rate hike.
    The Philadelphia Federal Reserve's gauge of U.S.
Mid-Atlantic business activity fell to a 1-1/2 year low, raising
concern about the U.S. economy and causing some traders to book
profits on bullish dollar bets, analysts said.
Lower yields on U.S. Treasuries and the euro's finding chart
support in the $1.15 area also contributed to the dollar's
weakness. 
    "Philly Fed missed on the downside. That was a convenient
excuse for traders to take profits," said Joe Manimbo, senior
market analyst with Western Union Business Solutions in
Washington.
    The Philadelphia Fed index on U.S. Mid-Atlantic business
activity fell to 19.9 in June from 34.4 in May, its steepest
fall since January 2014.
    "The market is quite sensitive to business activity data
lately. We did see some weakness in the dollar come through,"
said Brian Daingerfield, macro strategist at NatWest Markets in
Stamford, Connecticut.
    The escalation in the U.S.-China trade conflict had
underpinned safe-haven support for the dollar in recent days.
    The trade concerns and the weaker data dragged down U.S.
Treasury yields. The 10-year yield fell to 2.904
percent.
    The dollar index, which tracks the greenback against
six other currencies, shed 0.3 percent to 94.762 after earlier
touching 95.529, its highest level since last July.
    The euro rebounded from an 11-month low to $1.1618
after testing technical support in the $1.15 area.
    The single currency had fallen on bets of a protracted
period of monetary policy divergence between the U.S. Federal
Reserve and the European Central Bank. In addition, the Italian
government's appointment on Thursday of two euro-skeptics to
head key finance committees reignited worries about anti-euro
voices in the euro zone's third-largest economy.   
    Against the yen, the greenback lost 0.4 percent, to 110.93
yen. 
    Elsewhere, sterling rose nearly 0.7 percent at
$1.3257, recovering from a seven-month trough after the Bank of
England's chief economist, Andy Haldane, unexpectedly joined the
minority of policymakers calling for rates to rise to 0.75
percent, citing concerns about growing wage pressure.

    Haldane's vote, however, was not enough to flip the BOE's
decision to leave key borrowing costs at 0.5 percent. 
    The Mexican peso hit 20.2005 peso per dollar, its
strongest level in over two weeks after Mexico's central bank
increased benchmark rates by a quarter point to 7.75 percent in
a bid to hold down inflation.  
Currency bid prices at 2:56PM (1856 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1622        $1.1570     +0.45%         -3.12%      +1.1633     +1.1509
 Dollar/Yen       JPY=        109.9000       110.3500    -0.41%         -2.46%      +110.7500   +109.8600
 Euro/Yen         EURJPY=     127.72         127.72      +0.00%         -5.52%      +128.0200   +127.0100
 Dollar/Swiss     CHF=        0.9908         0.9959      -0.51%         +1.69%      +0.9985     +0.9898
 Sterling/Dollar  GBP=        1.3252         1.3171      +0.61%         -1.92%      +1.3269     +1.3103
 Dollar/Canadian  CAD=        1.3299         1.3310      -0.08%         +5.74%      +1.3334     +1.3285
 Australian/Doll  AUD=        0.7389         0.7367      +0.30%         -5.28%      +0.7393     +0.7346
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1514         1.1527      -0.11%         -1.50%      +1.1541     +1.1479
 Euro/Sterling    EURGBP=     0.8766         0.8785      -0.22%         -1.32%      +0.8799     +0.8726
 NZ Dollar/Dolar  NZD=        0.6880         0.6861      +0.28%         -2.91%      +0.6882     +0.6827
 Dollar/Norway    NOK=        8.1174         8.1778      -0.74%         -1.09%      +8.1987     +8.1161
 Euro/Norway      EURNOK=     9.4352         9.4674      -0.34%         -4.20%      +9.4734     +9.3911
 Dollar/Sweden    SEK=        8.8787         8.8819      +0.36%         +8.25%      +8.9498     +8.8706
 Euro/Sweden      EURSEK=     10.3189        10.2819     +0.36%         +4.88%      +10.3441    +10.2545
 
    
 (Reporting by Richard Leong in New York
Additional reporting by Tommy Wilkes in London
Editing by Leslie Adler)
  
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